Inchcape motors pension scheme

The State Pension Age (SPA) and Normal Minimum Pension Age are set to rise. Read more to find out how this could affect you:

• State Pension Age (SPA) – if you were born between 6 October 1954 and 5 April 1960, your SPA is 66. If you were born on or after 6 April 1960, the SPA is increasing to 67 between 2026 and 2028.
• Normal Minimum Pension Age – the earliest age to retire without tax penalties is usually 55, but it will rise to 57 from 6 April 2028 to stay 10 years below the SPA. 

Visit gov.uk/state-pension-age to check your SPA.

We’ve seen an unusual increase in requests for members to transfer their benefits out of the Scheme from a small number of independent financial adviser (IFA) firms.

While we investigate the situation, in line with guidance from The Pensions Regulator, we’ve moved transfer requests to an amber flag.

It means the Scheme administrator, Equiniti (EQ), will let you know that you’ll need to attend a free, mandatory ‘pension safeguarding’ appointment with MoneyHelper before your transfer request can proceed.

Read more about protecting yourself from scams here.

Triple lock: This remains in place so the State Pension will keep going up each year by the highest of 2.5%, inflation or earnings growth. State Pension increases will be 4.8% from April 2026.

ISA reforms: From April 2027, the annual tax-free allowance in cash ISAs will be reduced from £20,000 to £12,000 for under 65s. Savers aged 65+ can continue saving up to £20,000 in a cash ISA each year.

Personal tax thresholds frozen: The extension to 2030/31 is expected to raise £8.3bn by 2029/30 and bring 780,000 people into the basic rate band and 920,000 into the higher-rate band.

At the end of last year, we invested in a type of insurance policy – known as a bulk annuity or buy-in – with Legal & General (L&G) that removed some of the risks the Scheme faces. This enhancement has further strengthened the security of your IMPS Pension benefits.

Learn more about the Scheme’s buy-in and future journey by watching this video:

Losing a loved one is never easy, but claiming the death benefits you and your family are entitled to should be.

If your partner has unfortunately passed recently, or you know someone that has lost their partner, then we strongly recommend looking into the Bereavement Support Payment. This may be available to those who were the following when their partner passed:

• Under State Pension age
• Living in the UK or a country that pays bereavement benefits
• Married to your partner, in a civil partnership with them, or living with them as if you were married

Finally, the partner must have paid a certain amount of Class 1 or Class 2 National Insurance contributions in any one tax year since 6 April 1975 or died because of an accident at work or a disease caused by work.

For more information, please visit gov.uk/bereavement-support-payment

Moving forwards, the Pensions and Lifetime Savings Association (PLSA) will now be known as Pensions UK. Importantly, they have also updated their Retirement Living Standards, which help people picture what kind of lifestyle they could have in retirement.

Over the past year, a substantial reduction in energy costs has seen the amount needed for the minimum standard of living in retirement decrease, whilst inflation has seen the amount needed for a moderate standard of living increase.

The Retirement Living Standards suggest a single person will need to spend £13,400 a year for the minimum standard of living, £31,700 for a moderate standard of living and £43,900 to be comfortable. For couples, the equivalent numbers are £21,600, £43,900 and £60,600 each year. You can explore in more detail on the Pensions UK website: www.retirementlivingstandards.org.uk

The key things to note about pensions and related benefits are:

– Triple lock: this remains in place so the State Pension will keep going up each year by the highest of 2.5%, inflation or earnings growth. State Pension increases will be 4.1% from 6 April 2025.

Inheritance tax: there’s a new proposal that, from April 2027, unused pension pots would form part of your estate and be subject to inheritance tax. Your beneficiaries would only pay inheritance tax if your estate is above £325,000 (possibly up to £500,000 if you’re leaving your home to a direct descendant). The Government is currently consulting on this proposal.

Pension scheme administrators: administrators of registered pension schemes will need to be UK residents from 2026.

Overseas transfers: pension transfers to a qualifying recognised overseas pension scheme established in the European Economic Area or Gibraltar will now face a 25% overseas tax charge. They had previously been excluded from this charge.

If you’re aged 45 to 65, you should visit the GOV.UK digital ‘Midlife MOT’ service. It provides free online support that allows you to assess your finances and wellbeing to prepare for a more secure retirement. You can find this at: www.yourpension.gov.uk/mid-life-mot/.

The Finance Act 2024 abolished the lifetime allowance (LTA). The LTA was the amount of savings you could have at retirement from all your pension scheme benefits combined, without incurring an additional tax charge. 

The Government has replaced the LTA with two new tax-free lump sum allowances:

• the lump sum allowance (LSA) and lump sum – the LSA is £268,275 for the 2024/25 tax year and is the amount of tax-free cash you can take from your pension benefits.
• death benefit allowance (LSDBA) – the LSBDA is £1,073,100 for the 2024/25 tax year and is the amount of death benefits that can be paid tax free.

These new allowances apply to all your pension benefits.

Should you exceed the new allowances, an excess will be charged at your marginal tax rate. If you are impacted by these changes, we recommend you seek professional advice.

The annual allowance (AA) is the maximum amount of pension benefits you can save each year with the benefit of tax relief. For the 2024/25 tax year, it is £60,000, but if you have a high income or have started to draw money purchase benefits in a flexible way, your AA may be as low as £10,000 a year.  

You may have seen Inchcape PLC recently announced the decision to sell its UK retail operations to Group 1 Automotive UK Limited following a review of options for its UK retail business.

As many IMPS members were employed by an Inchcape UK retail business, you may wonder if this news will have any effect on the Scheme or the security of your IMPS benefits. We’ve had regular discussions with Inchcape over recent weeks and months about the UK strategic review – they’ve kept us informed of progress and there have been no surprises.

We’d like to assure you we, as Trustee of the Scheme, are here to act in your interests and manage the Scheme to ensure you receive the benefits due to you. Key points to note (some have been highlighted in previous communications) are:

• IMPS is well funded – as Trustees we’re comfortable there’s enough money in the Scheme to pay members’ benefits, based on advice we receive regularly from the Scheme’s Actuary.
• Your benefits are secure – the Scheme is held separately from Inchcape and will not be affected by the proposed sale of Inchcape’s UK retail operations. Member benefits are paid from the Scheme’s own fund of money, built up from contributions paid into the Scheme and invested by the Trustee.
• The Inchcape Group remains in support – Inchcape is committed to fund the Scheme so members receive the benefits they’ve been promised.
• The Scheme’s journey remains unchanged – we have an agreed long-term strategy for the Scheme and are continuing to take steps to further enhance the security of your benefits (including looking at investment options) and help you understand them better.

If you have any questions about your benefits or the Scheme in general, please get in touch with Equiniti, the Scheme administrator.